Airbus mulls U.S. assembly plant -sources

June 27, 2012|Reuters

June 27 (Reuters) - Europe's Airbus is seriously studyingthe possibility of opening an assembly line in the UnitedStates, marking a direct challenge to Boeing in its home marketas competition heats up in the global jet market, peoplefamiliar with the matter said.

The plan calls for the possible production of A320narrowbody jets, Airbus's best-selling model, most probably inMobile, Alabama, where EADS had planned to assemble U.S. tankeraircraft in a Pentagon contest it lost to Boeing lastyear.

Airbus and its Franco-German parent company EADShave said for some months that they were studying reshaping theplan to establish a foothold in commercial aircraft productionin the world's largest single passenger-jet market.

One of the sources did not rule out an imminentannouncement.

But an Airbus spokesman said the company had not yetcompleted its studies.

Airbus Chief Executive Fabrice Bregier was quoted in aSpanish newspaper on Wednesday as saying the planemaker wasactively looking at a possible new assembly plant.

"This is part of the brainstorming we are doing regardingour international development," El Economista quoted him saying.

Setting up in the United States would boost Airbus'spresence in the key U.S. market as it enters a phase of fleetrenewal, and would reduce currency risk by increasing itsexposure to costs in dollars, the currency in which aircraft aresold.

It would be the second Airbus assembly plant outside Europe.

None of the sources agreed to speak publicly on the matterbecause decisions have not yet been finalized.

Airbus is currently the world's largest producer ofpassenger jets ahead of Boeing. It assembles in Toulouse,France, the German port city of Hamburg and, since 2009, inTianjin outside Beijing, China. Airbus said earlier this monthit had started talks to extend the Tianjin venture beyond 2016.

When EADS lost the tanker contest to Boeing, analysts saidthe long, politically charged competition had focused industryattention on Alabama and fostered a belief that this could leadto future projects.

The original tanker proposal included a kernel of commercialproduction in Alabama with plans to assemble commercialfreighters alongside the U.S. Air Force refueling planes.

But the new proposal would spread its reach to passengerjets, a much larger market in which Airbus and Boeing competefiercely for the lion's share of a global jet market estimatedat $100 billion a year.

Alabama and the U.S. South have made strides in recent yearsin gaining aerospace and other manufacturing work.

Aerospace and defense industry employment in Alabama rose 13percent from 2002 to 2008, according to a study by the AlabamaAerospace Industry Association. High-tech space jobs arecentered around Huntsville, with Boeing and Lockheed Martin as major employers.